Question: 3. Consider a two-step Binomial model. In Figure 3 you are given an incomplete pricing tree, which corresponds to a European put option with strike

3. Consider a two-step Binomial model. In Figure 3 you are

3. Consider a two-step Binomial model. In Figure 3 you are given an incomplete pricing tree, which corresponds to a European put option with strike price K = 65. FOR MATEN 14.6 RSPP en G 17.09 35.6 ONKYO Permission Figure 3: European put with K = 65 of Problem 3. (a) (20 Points) Compute the per period interest rate r and the risk-neutral probability p*. (b) (20 Points) Find the price of the put option at t = 0. Moreover, determine the complete binomial tree for the stock price

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